The White House on Thursday announced its latest plan to address climate change by levying a $10 per-barrel tax on crude oil.
The Obama administration announced its plans while rolling out a comprehensive transportation strategy that will be the focus of the Department of Transportation’s budget request to Congress when it is issued next week.
“For too long, bipartisan support for innovative and expansive transportation investment has not been accompanied by a long-term plan for paying for it,” a White House fact sheet reads. “We need a sustainable funding solution that takes into account the integrated, interdependent nature of our transportation system.
“That is why we are proposing to fund these investments through a new $10 per barrel fee on oil paid by oil companies, which would be gradually phased in over five years,” the administration announced.
The fee raises the funding to make new investments in the transportation sector, while making the ailing Highway Trust Fund solvent.
The “fee on oil” also encourages the private sector innovation to reduce the U.S.’s reliance on fossil fuels “and at the same time invests in clean energy technologies that will power our future.”
The proposal was announced after nearly daily reports of oil companies hemorrhaging profits because of the low cost of oil.
The tax won’t put U.S. energy producers at a competitive disadvantage, said Jeff Zients, director of the National Economic Council. It will be levied only on imported fuel, not exported, he said. Therefore, the Obama administration doesn’t “anticipate any negative impact,” he said. “Our domestic producers will continue to operate on a level playing field.”
Zients said the tax will not be collected “at the wellhead” but could not say where along the supply chain it would be levied.
“We’re looking forward to working with Congress” to figure out such details, he said.
House Speaker Paul Ryan said the proposal was “dead on arrival” in Congress.
“This announcement, the latest in a series of regulatory attacks on the energy sector, proves President Obama is still on a mission to destroy a major backbone of the U.S. economy. The president should be proposing policies to grow our economy instead of sacrificing it to appease progressive climate activists,” he said.
House Energy and Commerce Committee Chairman Fred Upton, R-Mich., said the president’s plan looked like something that was “ripped from the Onion,” a fake newspaper with outrageous stories.
The tax is part of a broader transportation proposal called the “21st Century Clean Transportation System.” The plan increases U.S. investments in clean transportation infrastructure by 50 percent, while reforming investments to help reduce carbon pollution, cut oil consumption, and create new jobs.
? Nicole Duran contributed to this report.
